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Investing.com - Ladenburg Thalmann has raised its price target on American Electric Power (NASDAQ:AEP) to $112.00 from $109.00 while maintaining a Neutral rating on the stock. The utility giant, with a market capitalization of nearly $60 billion, has delivered impressive returns with a 24.67% gain year-to-date, according to InvestingPro data.
The price target increase reflects AEP’s planned higher capital spending that was previewed during the company’s second quarter earnings call. The firm cited this expanded investment plan as the basis for increasing its earnings per share estimates for the utility. The company’s strong financial position is underscored by its 15-year streak of consecutive dividend increases, currently yielding 3.32%.
American Electric Power announced it expects to increase its 2025-29 capital spending forecast by $16 billion to a total of $70 billion, with this update expected to be formally presented during its third quarter earnings call.
According to Ladenburg Thalmann, higher transmission spending in Texas represents approximately 45% of the planned $16 billion increase. Higher generation spending in Indiana and Oklahoma accounts for 32% of the additional capital expenditure.
The remainder of the increased spending will be allocated to transmission and distribution investments spread throughout the American Electric Power system, completing the utility’s expanded five-year capital program.
In other recent news, American Electric Power reported second-quarter earnings per share of $1.43, surpassing the consensus estimate of $1.27. The company also exceeded revenue forecasts, reporting $5.09 billion compared to the anticipated $4.9 billion. This positive performance has led several firms to adjust their price targets for the company. Jefferies raised its price target to $120, citing the company’s $70 billion capital expenditure plan for 2026-2030 and its advanced transmission capabilities. Mizuho (NYSE:MFG) increased its target to $116 while maintaining a Neutral rating, acknowledging the company’s robust earnings and strategic plans. BMO Capital also raised its price target to $121, maintaining an Outperform rating due to the strong earnings that exceeded both its own and consensus estimates. These developments highlight investor confidence in American Electric Power’s future prospects.
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